Bid for a Tender That Would Double Revenue
Question
“We are a profitable manufacturer with about 60 employees and EUR 6 million in annual revenue. We can bid on a three-year tender worth around EUR 4.5 million per year, which would almost double our revenue, but it would require about EUR 900,000 in new equipment, hiring around 25 people, accepting 60-day payment terms and strict penalties for late delivery. Should we bid?”
What to question
Could the company survive the first six months of the contract if delivery penalties are triggered and the buyer pays only after 60 days? What happens to the new equipment and 25 new employees when the contract ends after three years? Would bidding for one lot or with a partner capture most of the benefit with a fraction of the risk?
How the depth changes
Focused → broader → deepest
Four perspectives quickly separate the size of the opportunity from the capacity to deliver it: whether current production, management and quality…
Five additional perspectives challenge the assumption that winning is automatically good news, model a downside where equipment arrives late, new…
Six further perspectives stress-test the financing structure, including the bank lines, leasing and guarantees needed to cover the cash-flow gap,…
Example answer / Illustrated Decision Brief
The decision should not rest on the headline figure of EUR 4.5 million a year, but on whether the company can deliver the contract reliably and finance it without straining the existing business. A realistic cash-flow model is needed, covering equipment, hiring, 60-day payment terms and a scenario in which penalties are triggered during the ramp-up. The penalty clauses, guarantees and termination terms should be reviewed carefully, and a plan should exist for the equipment and new staff after the three years. If the full volume is too large, bidding for a single lot or together with a partner is often the more measured way to capture the opportunity without betting the whole company on it.
Illustrative only. Real consultation outputs depend on the facts supplied, available evidence and the selected consultation level.
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